The proposed mega-merger between Sprint Corp. and T-Mobile USA Inc. could transform the U.S. telecommunications sector.

The $26.5 billion deal is also going to transform the next several months—at least—for Brandon Parris, a Morrison & Foerster corporate partner and former co-chair of the firm's global corporate department.

Brandon Parris.

“This is the kind of deal that M&A lawyers live for,” Parris said. “It's very big and extremely complicated. There are two big public companies, each controlled by a stockholder from a different country, so it's complicated and cross-border.”

Along with Robert Townsend, co-chair of the firm's global M&A practice, and David Slotkin, who co-chairs its corporate finance and REIT practices, Parris is leading the 30-lawyer team  representing Sprint and its largest shareholder, longtime MoFo client SoftBank.

If the merger receives shareholder and regulatory approval, the combined $146 billion company will create a U.S. telecommunications rival to industry leaders AT&T Inc. and Verizon Communications Inc.

Wachtell, Lipton, Rosen & Katz, led by partners Adam Emmerich and David Lam, is advising T-Mobile and its owner Deutsche Telekom. At last count, 18 law firms are working on the deal. Emmerich and Lam did not respond to requests for interviews.

Robert Townsend.

“It wasn't a forgone conclusion” that Morrison & Foerster would win the lead role for Sprint and Softbank, Parris said, even though his firm had advised Softbank when it purchased its controlling interest in Sprint, and has represented the Japanese company on investments in Uber Technologies Inc.
and other companies.

But “as this deal began to heat up,” Parris said, the conversations with the client made it clear MoFo was being considered for the lead.

The negotiating teams have overcome significant hurdles already, and Parris said he expects the lawyers to face more as regulators nationwide pore over the deal.

“A deal of this size and complexity, getting the parties to agree created its own challenges, and the next phase of this certainly will have its own challenges,” he said.

To get to the point where both sides were ready to go forward, the companies had to resolve Deutsche Telekom's goal of having the newly merged company's financials consolidated with its own, even though it would not have a majority stake in the company when the deal closed, Parris said.

David Slotkin.

“We had to get that through contractual obligations,” he said. The other initial challenge was how much debt the two companies together share—$67 billion, by Parris' calculation.

The deal, however, has the strategic advantage of regulatory familiarity—a potential boost given the Trump administration's wariness of foreign stakeholders assuming control of U.S.-based technology companies, Parris said. Only six years ago, when a MoFo team represented Tokyo-based SoftBank in its 2012 investment to acquire a 70 percent stake in Sprint, in a transaction valued at $45 billion, the deal required approval from the Committee on Foreign Investment in the United States (CFIUS).

“It was pretty thoroughly reviewed with CFIUS,” Parris said of that deal. Since then, he said, “Sprint has maintained an extremely good and open relationship” with CFIUS officials.

Notably, however, those regulators now answer to President Donald Trump's White House rather than by former President Barack Obama's.

Under the Obama administration, the U.S. Department of Justice signaled that it would not look favorably on a marriage of Sprint and T-Mobile. The change in administrations has not vanquished all those voices, but Townsend noted the atmosphere has changed.

“We expect there are people in the Department of Justice that have a developed point of view,” Townsend said, declining to elaborate.

Townsend also cited the advantages gained from his firm's and Softbank's prior experience with CFIUS. “We have a great deal of experience with CFIUS, and they know the participants in this deal, so we hope the review will go well,” he said.

Not surprisingly, Townsend downplayed the antitrust concerns swirling about the deal, and touted its advantages. The newly merged company would have resources to develop 5G technology cellular service and take telecommunications in this country to a new level, he said. This is a significant point, since the United States is behind other countries, such as China, where the government has invested in wireless, he added.

“It this transaction is approved, it will be transformational to the wireless infrastructure in this country,” Townsend said.